Textbook Notes (367,754)
Canada (161,370)
Management (806)
MGM101H5 (354)
Chapter 3

Chapter 3 Notes.docx

3 Pages
59 Views
Unlock Document

Department
Management
Course
MGM101H5
Professor
Dave Swanston
Semester
Fall

Description
Chapter 3 – What is Business? The Big Picture - System of integrated actions to ensure organization develops and grows market for its goods/services and creates value (wealth) on behalf of stakeholders - Commercial Endeavours; refers to markets the organization serves, products and services it offers, needs it professes to meet in the marketplace - Employee Interaction; refers to value-creating skills an organization’s employees brings to marketplace (success of organization lies within labour force) - Organization Efficiency and Structure; reflection of complexities of business activities that circulate within organization - These three when combined, result in understanding of business system, result in Business Foundation What is Business? - Business; refers to mission-focused activities aimed at identifying needs of market, and development of solution to such needs through acquisition, transformation of resources, to be delivered to market for profit - Assets; refers to infrastructure and resource base of organization o Includes; land, buildings, bricks and mortar, equipment - Labour; refers to human resource requirements of business - Capital; refers to money needed by organization to support asset-based expenditures, and invest in development of new products - Managerial Acumen; refers to foresight, drive, knowledge, ability of organization’s key individuals – owners and top-level managers - Business-model system; operational platform or structure that business uses to generate revenue - Assets + Labour + Capital + Managerial Acumen = Business Model Composition - Business owner conduct “strategy and 3C assessment” (capabilities, competencies, capacity) - 3C assessment o Analyzing resources available to organization, capabilities and competencies it possesses, defines capacity of what organization can and cannot do - Strategy; specific objectives of organization - Competitive Advantage; advantage an organization has over its competitors that enables it to generate more sales, achieve greater margins, achieve lower cost base, or attract and retain more customers - Strategy and 3C Assessment -> Business Plan Development -> Business Plan Execution -> Company Performance and Profitability -> Company Growth and Reinvention - Role of business owner/management team is to anticipate, sense opportunity to create product and deliver to targeted customers - Businesses grow by executing series of planning cycles over time - SMAC = specific, measureable, actionable, controllable - Declining of revenue, or reduction in profitability are key identifiers whether plan is working or not - Failure to meet objectives of planning cycle can be result of poor positioning, poor operational execution, or both - For-Profit Companies; organizations whose objective is profitability and wealth creation on behalf of stakeholders - Not-For-Profit Companies (NFP); organizations whose objective is to deliver service to communities they serve via a model of collective interest and social goals o Still need a business plan, operating model, business system Fundamental Objectives of Business - First (short-term profit); profit on monthly, quarterly, etc. basis is fundamental to ensure immediate survival - Second (long-term growth and profitability); set in motion ability of organization to achieve long-term growth and profitability - Third (social and environmental responsibility); social and environmental responsibility o Green initiatives, truthful ads, environmentally friendly - Firms need to make decision that enable all three responsibilities to be considered equally Business Model and Profitability - Profitability used for comparing how well company is performing in comparison with competitors Difference between Profit and Profitability - Profit; the “bottom line” result an organization has realized for an identified, immediate period of time (Total Revenue – Total Expenses = Profit) - Profitability; measures how well company is using its resources over period of time to generate earnings o Corresponds to efficiency and effectiveness of organization to use its a
More Less

Related notes for MGM101H5

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit